State bodies holding €3bn on deposit

Funds of up to €3 billion are being held on deposit cumulatively by Government departments, local authorities and State bodies, an in-depth query across a number of agencies has discovered.

In a series of parliamentary questions, the Wicklow TD Simon Harris sought information on the deposits – both short-term and long-term – being held by the hundreds of State bodies.

When he and his staff calculated the responses they received from multiple sources, they were astonished to find that the total amounted to well over €2 billion – and that was in the absence of any response from a number of larger agencies, including the Health Services Executive.

Arising from the response, he asked if all State bodies should have individual accounts in which billions of euro were held, albeit predominantly on a short-term basis.

Mr Harris also discovered there were huge discrepancies between the level of deposits being held by agencies. This was particularly evident among local authorities, where some keep massive sums on deposit while others adopt a more minimalist approach.

Working capital

In their responses many agencies said that the primary purpose of keeping such large sums on deposit was to maintain working capital to pay wages, salaries, supplier invoices and other day-to-day expenses.

The Department of Education, for example, holds €41 million in a commercial account while it awaits the establishment of the Residential Institutions Statutory Fund Board, which will be managed by the National Treasury Management Agency (NTMA). The Fine Gael deputy said there were good reasons why State bodies held money on deposit but wondered was it the most efficient practice to allow them all to manage the deposits, rather than allowing one agency, such as the NTMA, to take over that function.

Greater benefit

He said he was sure that the sheer extent of the overall sum might lead to a greater financial benefit to the State if managed by one body.

Among the largest deposits being held is €200 million which is being held in short interbank accounts by the Irish Bank Resolution Corporation, which is in liquidation.

The Road Safety Authority has €100 million on deposit according to the response, while the Rail Procurement Agency has deposits of €45 million.